18 Jan Management Innovation
In the extant literature, management innovation is argued to be very ambiguous and hard to replicate, and hence is more likely to lead to sustainable competitive advantage (Lin, Su, & Higgins, 2016). Management innovation constitutes the rules and routines by which work gets done inside an organization’s boundaries (Birkinshaw et al., 2008). The typical and most famous examples of management innovation include the industrial research laboratory at GE, the capital-budgeting techniques of Dupont, total quality management (TQM), just-in-time production, quality circle, cost accounting, and 360-degree feedback (Damanpour & Aravind, 2012). Generally speaking, firms can achieve management innovation by changing organizational structures, processes, and information technology (IT) applications. Specifically, changes in organizational structures (e.g., from hierarchical to horizontal structures) can increase the productivity of labour in the production process. Changes in organizational processes (e.g., just-in-time inventory and lean production) can reduce the amount of capital needed to support in-progress work (Edquist, Hommen, & McKelvey, 2001). In service industries, the integration of IT into operation processes reflects the use of new knowledge management methods and office automation to make managerial processes and systems more efficient (Walker, Chen, & Aravind, 2015).
- Birkinshaw, J., Hamel, G., & Mol, M. J. (2008). Management innovation. Academy of Management Review, 33(4), 825–845.
- Damanpour, F., & Aravind, D. (2012). Managerial innovation: Conceptions, processes, and antecedents. Management and Organization Review, 8(2), 423–454.
- Edquist, C., Hommen, L., & McKelvey, M. D. (2001). Innovation and employment: Process versus product innovation. Edward Elgar Publishing.
- Walker, R. M., Chen, J., & Aravind, D. (2015). Management innovation and firm performance: An integration of research findings. European Management Journal, 33(5), 407–422.